The dollar rose to the highest level in more than two months on Tuesday as stronger-than-expected U.S. economic reports lifted the greenback and concerns over the potential for European banks encountering a new round of problems weighed on the shared euro.

The dollar index, which tracks the greenback against a trade-weighted basket of six major counterparts, rose to 77.022, compared with 76.351 late Monday. During the session, it touched 77.092, the highest on a closing basis since Oct. 1. The euro fell to the lowest in three months, trading at $1.4531, down from $1.4653 late Monday, while the dollar jumped about 1.1% to 89.64 Japanese yen.

Fed policy makers are expected to keep benchmark interest rates steady and retain the vast majority of the forward-looking portions of its statement on the economy due out Wednesday afternoon. A media report hinted that the Fed may raise the discount rate — its lending rate directly to banks — as a small, first step away from its ultra-loose monetary policy it put in place since the credit crisis began. Several analysts downplayed this possibility, noting the Fed may opt to make such a change in a separate statement at a later time.

Expectations that any steps may be taken by the U.S. central bank make the dollar less attractive for carry trades, in which investors borrow a low-yielding currency to fund purchases of higher-yielding assets.